ADP Employment Number

Definition

The ADP Employment Report is a monthly report released by the ADP company that provides data on employment in the U.S. private sector. It serves as an important reference indicator before the release of the U.S. non-farm payroll data. The report includes employment statistics from sectors such as manufacturing, services, and construction, offering predictive insights into the non-farm payroll figures.

Origin

The ADP Employment Report was first introduced in 2006 by Automatic Data Processing, Inc. (ADP). It was designed to give investors and economists an early signal of changes in U.S. private sector employment, aiding in the prediction of upcoming government non-farm payroll data.

Categories and Features

The ADP Employment Report primarily covers changes in private sector employment, excluding government jobs. It is characterized by its high frequency, being released monthly, and provides timely insights into the U.S. job market. The data is sourced from ADP's payroll processing systems, ensuring high accuracy and timeliness.

Case Studies

For instance, in March 2020, the ADP Employment Report showed a significant drop in U.S. private sector jobs, which aligned with the subsequent non-farm payroll data, reflecting the impact of the COVID-19 pandemic on the job market. Another example is January 2018, when the ADP report indicated strong job growth, foreshadowing a positive non-farm payroll outcome for that month.

Common Issues

Investors often misunderstand the relationship between the ADP Employment Report and non-farm payroll data, assuming they always match perfectly. In reality, ADP data covers only the private sector and may sometimes differ from government figures. Additionally, the market might overreact to short-term fluctuations in ADP data, overlooking its long-term trends.